Savaria Corporation

I would like to welcome everyone to Saverio Corporation's first quarter 2025 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you need to press star 101 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 101 again. This call may contain forward-looking statements which are subject to a disclosure statement contained in Severia's most recent press release issued on May 7, 2025, with respect to its first quarter 2025 results. Thank you, Mr. Bourassa. You may begin your conference.

Thanks, Victor, and good morning, everyone. So today we'll start with a small recap of our Q1 results, then Steve will update us on financial, and JP will do an update on Severia 1, then follow that with a Q&A session. So once again, I'm very proud of our Q1 results. It showed that the transformation is stable for a fifth good quarter in a row in an environment where uncertainty, where all our products are UMSC compliant, meaning that there's no duty applicable on all our finished products. So some of the key highlights for the first quarter. So fantastic performance at 18.5% of EBITDA in our weakest quarter, which is always Q1 due to winter, the numbers of working days, so quite proud of our Q1. Looking back at the mirror, we can see that the last 12 months, we're trading at 19% of a bid up, which really showed the improvement on the severe one, which GP is going to highlight later. And we are getting closer to the goal of severe one, which was to be at 20%. As you can see in the DNA, we did not change our guidance due to economic uncertainty and tariff noise, but let's remain assured that we want to finish at the top of the bracket. So growth in North America was, once again, strong, 11.8%. While in Europe, it was slightly negative. I think the reset is almost done. And patient care had a modest growth of 2.1% after a fantastic Q4 last year. We know it's important to grow, and this is part of the pillar for 2025. And we're confident we'll be able to achieve that because of new product launch, a growing share of wallet with our dealer, and onboarding some new dealers as well. So talking about new product, we started to assemble a Luma home elevator at our factory in Mexico, which we expect SAIS to, in the coming month, to be able to ramp up as we train our dealer in our SAIS team. Product is looking outstanding. It's a product that will be sold worldwide, easy to install, stockable for the dealer that want to stock it, so bring a lot of key advantage to a dealer. Debt ratio finished at 1.5 in Q1. Now we have an available fund, or at least before last night, of $254 million at the end of March 31st, which put us in a very good position to make some investment or acquisition. So talking of acquisition, as you can see this morning, we have closed a small token, Western Elevator. It was one of our long-term dealers in B.C., Canada. And it was strategic for us as it continues to solidify our position in the B.C. area with our own direct store of Garaventa and their own direct store with Western. That's also to add to bring some additional volume as they were not buying other products from Savaria. Their annual sales were approximately 7.5 million Canadian. So welcome to all the new employees in BC. And as also you can see in our press release, we decided to invest $30 million Canadian in Greenville to expand our factory there so that we have a new 55,000 square foot available in the second half of next year. This is on top of the 60,000 square foot that we have free up in the last quarter in Q1. And we have started to assemble our Eclipse home elevator as of April 4th. Because regardless of tariff, we wanted to assemble more in the U.S., and that's what we have done in the first quarter. So thank you very much to the team in Greenville and Toronto for the speed of execution. That was an outstanding launch. So on that, thanks to all our employees in Savaria and our dealers for the fantastic Q1. Steve, financial, please.

Thank you, Sebastian, and good morning, everyone. I'm excited to share some remarks regarding our Q1 2025 consolidated financial metrics. So the key highlights for the quarter include a record first quarter for EBITDA by a wide margin. Our EBITDA grew by $6 million, or about 17%, to $40.6 million for the quarter. As Sebastian mentioned, Q1 is typically a soft quarter for us, and yet, in spite of the external context and threat of tariffs, our results are very strong. Revenue growth of 5.2%, with particularly strong results of 11.8% growth in North America accessibility. Part of the benefit here is favorable FX rate movement, but this also shows that we're well diversified. In addition, gross margin increased by 180 basis points to 37.8%, and our EBITDA margins increased 190 basis points to 18.5%. These are very strong results for a Q1. Our trailing 12-month adjusted EBITDA margin is now 19%. And lastly, strong cash flow with operating cash flows of up 18% versus last year. Thanks to our financial discipline and improvement in working capital performance, we were able to lower our leverage ratio of net debt to adjusted EBITDA to 1.49 from 1.63 at the end of 2024. So now, starting with consolidated revenues for the quarter, we generated revenues of $220.2 million, an increase of 5.2% versus last year. This growth is driven by 0.8% organic growth, positive foreign exchange impact of 3.3%, and an acquisition impact of 1.1%. Our accessibility segment had growth of 6.1% in a quarter, driven by an 11.8% growth in North America, partially offset by a contraction of 2.8% in Europe. North America was able to deliver constant revenues in a more uncertain market environment. We've made a number of changes to our sales strategy in Europe in Q1 of 2024, so we have tough comparables. but we are very excited for the future, especially as we introduce new products into the market, including the new Luma and the MultiLift. Patient care had modest growth of 2.1% in the quarter and came off of a very strong Q4 2024. This business is significantly project-based and can be lumpy, and positive news that our backlog also grew significantly during the quarter, which bodes very well for future quarterly sales. The net acquisition impact, as mentioned, of 1.1% was driven by the MATOT-branded dumbwaiters and material lifts, which we acquired in April of 2024. As previously stated, our consolidated gross margin for the quarter was 37.8%. This performance represents a marked improvement of 180 basis points over prior year and a 10 basis point improvement over Q4 2024. driven by continued operational efficiencies realized under SEVERIA 1. Both accessibility and patient care segments contributed to this improvement, underscoring the effectiveness of our ongoing initiatives to streamline operations, enhance margin quality, and drive sustainable growth. This gross margin improvement is possible due to SEVERIA's vertically integrated operating model, and therefore more protected from inflationary pressures, as well as Severia One initiatives that are improving all aspects of the business. Adjusted EBITDA was $40.6 million for the quarter, representing the fourth quarter in a row above the $40 million threshold. Adjusted EBITDA margin finished at 18.5% for the quarter. This represents an improvement of 190 basis points over Q1 2024, and as noted earlier, our trailing 12 months adjusted EBITDA margin is now 19%. Both accessibility and patient care saw improvements in adjusted EBITDA margin. This performance enhancement is primarily driven from the improvements in gross margin previously mentioned. We incurred $4.7 million in strategic initiative expenses for the quarter in line with our expectations, and these fees are mainly consulting fees similar to last year and will repeat for the next three quarters, but will end in Q4 of 2025. Finance costs were $3.5 million for the quarter compared to $2.3 million last year. Interest on long-term debt decreased by $1.4 million due to reduced interest rates on our debt as well as a lower overall debt balance versus last year. The driver of the year-over-year increase in total finance costs is a larger unrealized gain that we had in Q1 of 2024 last year versus a smaller gain in Q1 of 2025 this year, the difference being $2.4 million. I'm now going to look at and discuss the balance sheet and cash flow. So cash flow from operations in Q1 was $31.3 million, which is an increase of $4.7 million versus last year coming from higher EBITDA. We reduced working capital by $2.2 million in the quarter, coming mainly from higher trade payables. CapEx for the quarter finished at $4.7 million, which is 2.2% of sales and in our target range of 2% to 2.5% of sales. Free cash flow after debt-related costs and dividends was $10.3 million for the quarter, which is $3.8 million, or 58% higher than prior year. The strong free cash flow contributed to repaying a debt of $7.5 million and reduced our leverage ratio to 1.49 and better prepares us for any opportunities that lie ahead. With regards to our guidance, Due to continued uncertainty regarding tariffs, we're keeping our 2025 guidance unchanged with projected revenues of approximately $925 million and an expected adjusted EBITDA margin between 17% and 20%. And with that, this completes my prepared remarks. I'll now turn the call over to Jean-Philippe, our CTO, to provide further details on how we're progressing with Sverige 1.

Thank you, Steve. Good morning, everyone. As Seb and Steve mentioned, our adjusted EBITDA this quarter was 6 million or 17% higher than last year. This is particularly impressive given the context and the uncertainties that lie around it. Most of the improvements can be tracked back to SAVARI-1 initiatives, and those are balanced between commercial initiatives and cost reductions. Our top line has been growing in North America in particular thanks to the efforts we put in improving our operations in Brampton, in Surrey, and Mexico. as well as the sales growth efforts that paid off. On the cost side, we benefited from many improvements implemented last year. So what's happening with SavariaOne? By the end of Q1, we had implemented more than 350 improvement initiatives across the business. Yet, in Q1 alone, we added 130 new initiatives to our SavariaOne pipeline. Not all of those have associated benefits, but those that do added millions of dollars to our projections. Some examples of the successes we had in Q1 are the following. One is we innovated in the fabrication process of our free-curve stairlift, where the welded parts used to ensure a good alignment and coupling of the rails during the installation of the stairlift is now using a new technology and process. It's called the HandyBlock, and it ensures better alignment of the rails, a smoother ride for users, but also a simplified fabrication process requiring about a dozen less welders in however large. We transferred part of the bed frame parts production to our Mexico facility. We still assemble our long-term care beds in Beamsville, Ontario, but over the past months, we have been leveraging our Mexico facility to produce bed frame parts, which not only reduces our overall bed fabrication costs, but also frees up capacity in Beamsville for us to grow cells when demand is strong, like it happened in Q1 this year. We completed about 20 different procurement initiatives across all our business In the majority of those, we either renegotiated price with an incumbent supplier through a competitive process or use an existing supplier at a new factory. Also, we took a hard look at our IP license costs across the globe and scrubbed those either for redundancies or better rates. And we're not finished. While the impact is not always easy to see, we are making progress with self-growth initiatives. For example, we added about 50 new dealers to our network across Bavaria and Garaventa in North America. In Europe, we won major new accounts this year for Handicare stereotypes. And in patient care, our backlog is as high as it's ever been. So some of these impacts are offset by other factors, but we are on track. These are just some examples, but in total, we implemented about 50 initiatives in Q1 this year. We also made substantial progress on three strategic fronts in Q1. The first is we launched a new through-the-floor elevator named Luma. The Luma is a product we developed in-house to sell in North America and in Europe. It will be manufactured in our Mexico facility for distribution worldwide. We think the Luma is a very attractive product thanks to its slick design, its robust yet elegant construction, and the fact that it is simpler to install than competitor products. We are now starting to offer it to selected dealers in both North America and in Europe. The second is in Europe, On top of the Luma, we are now introducing the Seraia MultiLift. So it's the same MultiLift we had in North America, but adapted for European standards. This PorchLift will further enhance our portfolio and be another product that our Garaventa direct stores can sell in Europe, making us less reliant on third-party products. We can therefore now offer a much broader range of products for customers and dealers in Europe, as well as aligned to our one-stop shop vision. Finally, in our patient care division, Q1 2025 was the second quarter where we shipped our new Savaria M-series clinical ceiling lift. The essential model was the one most sold in Q4 last year, and this year we started selling more of the clinical version, which includes a number of features like the three-down feature. We believe we now have the best ceiling lift on the market, and yet we will continue to upgrade it and launch innovative accessories in the coming months. So what's next for SavariOne? We have our work cut out for ourselves this year and plan to continue to execute our pipeline of initiatives in the coming months. We still have more to come on material cost reductions, on productivity improvements, and most importantly on sales growth, as well as a couple interesting product innovations in the pipeline for this year. Given the health of our SavariOne pipeline and with the caveat that we are always subject to external market forces, That's why, as Seb and Steve mentioned, we still maintain our guidance and we're aiming for the high end of it. So thank you for your attention. I will hand it over back to Seb for closing remarks.

Okay, thank you, JP and Steve. I think very good update on server one. As you see, we still have some traction on it and it's very well structured and we're ready to be independent this year, okay, by ourselves so that going forward, all that we have learned in the last two years, we should be able to continue to apply that on future business. So I guess, Victor, we are ready for Q&A session, please.

Thank you. And as a reminder, to ask a question, you need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question will come from Derek Lessard from TD Callen. Your line is open.

Yeah, good morning, everybody, and congrats on the quarter and the acquisition. Thanks, Eric. Sebastian, I just had actually one question for me this morning. Could you maybe talk about the efforts to repatriate manufacturing back to the US? I guess where you guys are right now, maybe an update on some of the capacity you've got there, And ultimately, what could this look like in a few years down the road when you've built this out?

Thank you, Derek. Very good question and a very good report you did also this morning. So basically, yeah, U.S., okay, yes, right now we have been lucky. All our products are UMSC compliant, so all our finished products, they are not impacted by duty. But we wanted to be closer to our market in the U.S., so we had some extra capacity in our building of Greenville. We have 200,000 square foot. We have decided to free up 60,000 square foot to be more condensed on the patient care. And we have started, okay, in April to do our Eclipse home elevator, which is our best seller in North America. So basically we're in production since the beginning of April with this product. So that's closer to the market. So that's good news. And right now we do some production in the U.S., some in Canada. But that was our first product. The straight stair lift, we're always distributed from Greenville. So this continues. And now we still have a lot of square footage available. we always try to think about the mid long term right so that's why this investment of 60 000 square foot will bring up here 115 000 square foot of manufacturing capacity for the accessibility now we have two big factories in surrey in vancouver and surrey vancouver and toronto we're always about to think about the future but definitely as we expand uh i think we can have a second third line of products that we'll be able to make locally And the success, we have 12 factories worldwide. Sometimes we sell to each other. We do some subcomponents in Mexico and China and Canada. That's what makes the success of Savera to be local but worldwide at the same time.

Yeah, thanks, Sebastian. Very helpful. That's it for me, and congrats again. Thanks.

Thank you. One moment for our next question. Our next question will come from Michael Glenn from Raymond James. Your line is open. Hey, good morning.

Good morning. So just looking for an update as to stairlift sales in North America. Have you been able to make any gains with market share, with dealer penetration? Just looking for an update as to how you see that business evolving over the coming year.

Very good question. So for sure, yeah, we brought back the manufacturing of curb stairlift in North America. So now we are fully manufacturing in Toronto. The distribution of straight from Canada or the US, depending where the customer is. This is an area where we could be better. percent organic growth in North America, I would say home elevator has been maybe the best segment out of that. Unfortunately, we don't disclose the sales per product, but definitely Sterilift is an area where we are good. We have very good design, good products, and this is something in North America that we wish to be better in the future.

Can you just give some idea, like what do you need to do better in in stairlift? Is it marketing? Is it adding dealers? Just trying to get some sense as to what you can do better to boost market share there.

Unfortunately, it is always very important for dealers to give them some leads to help them to sell their products. I would say that would be a good answer, a good way to support them so that we can have more sales. Okay.

And then on Elevators in North America, you just gave an indication that it was the better performing product in the period. Are you seeing any change in demand patterns out of U.S. buyers? Have you seen any softness in the market just given some of the housing data that we've been seeing?

I would say it's too soon to talk on that. We don't receive cancellation of projects. We see with our configurator, our code builder, the activity coding is still quite good. The number of drawings people make is good. But don't forget one thing. We are lucky. We're in a good industry. The aging population, whatever, when you're aging, you're aging, you need to stay at home. So you will probably do your accessibility product first before you do some other luxury expenses. So I think this is good. Architect, contractor, professional is one of the things we're quite strong with working on these with them. The density of the population, you know, there's a lot of townhouse in North America, three, four floor. So it's not just if you're aging that you will think about putting an elevator. So I will say for now, again, it's too soon to talk. And the person who has worked to put an elevator just got his permits. Even though the economy was uncertain the last two, three months, I think we'll probably continue with this project. So, so far, no cancellation activity is good. So maybe Steve, you want to add something?

Yeah, just to add on this, our backlog remains very strong, and we have quite a few direct stores in North America, not just in the U.S., that give us really good insight into what's happening in the market, because they're booking jobs out anywhere from six months to two years, right? So our backlog has actually increased at our direct stores, so that gives us really good indication that the market is still healthy. I mean, we do see the same headlines that you're seeing, but But in our business and, you know, the shortage in housing and the products that we're selling, we're still able to build our backlog right now. So sort of despite that noise in the headlines, we still feel positive about, feel very positive about what the future is going to bring.

Okay, excellent. Thank you. Thank you. One moment for our next question. Our next question will come from the line of Justin Keywood from Stiefel. Your line is open.

Good morning. Thanks for taking my call. Nice to see the results. Just a question on the guidance. Maintained adjusted EBITDA margins of 17% to 20%. I'm just trying to understand that a bit because 18.5% in Q1 and the mention of most of Safari House products being USMCA compliant, is that just being overly conservative, the guidance? Is there any... anticipated headwinds that we should know about?

Very good question, Justin, and good morning. You know, in the last three months, there's been drama one week after the other. You have no idea how much time me, GP, and Steve and the team have worked on a tariff situation. We had tariff, no tariff, there's a deadline, no deadline. Right now, again, it is UMSC compliant. Are they going to renegotiate the agreement in the next year or so? I think nobody knows when it could happen. I think it's just extra conservativeness. Again, I don't like it. We like to have a good budget. We have said that the target has always been 20% of survival. We maintain that. But because of the economic situation, we keep the bracket. And I think as we will go during the year, if the situation remains the same, for sure, we'll try to narrow down a bit the guidance. But for now, we have decided to keep it a bit wide to be conservative.

Understood. And then just on M&A balance sheet, obviously pretty healthy, 1.5 times. We saw the tuck-in deal in Western Canada. Could you just describe the pipeline and is there an opportunity for additional M&A or do you think you're going to be a bit conservative just given with everything that's going on?

Again, I think our front line is always open for acquisition. We are visit and you know it takes time right so i think for sure talking is always key again we can absorb that without too much effort okay especially after a survival structure so definitely dealer we have done that in the past or by one or two uh be very selective so uh again could we see some more talking this year like last year was made a very strategic product that is very complementary Now that we're fully manufacturing in-house in Toronto, we are going to have a growing the size of Meta this year. So we need to continue to do a small tuck-in. I think that's something that will help us for organic growth. So let's see the next few months. If we are able to do some more, we'll see. The phone lines are open for sure.

Great.

Thank you very much.

One moment for the next question. Our next question comes from Frederick Tremblay from Desjardins Capital Markets. Your line is open.

Thanks. Good morning. Just with what we're seeing with the trade dynamics in the U.S., I was wondering if you had any comments on the competitive environment in that country, especially as Cerbera competes with some local manufacturers there. Have you noticed any sort of changes on that front or no meaningful changes so far?

It's always a bit difficult, Fred, because we are the only public company into accessibility. So I think it's the same competitive environment. Again, we are lucky it's a good industry. There's good competitors. We all respect each other. So I would say there's no big change of dynamics into the industry. And I think we are definitely the most active parties, I think. by bringing new products, making token acquisition, doing more things for dealers. So I think that's why Sabah remains a great partner because we bring value to a dealer.

Great. Moving to Europe, obviously there's been some efforts on margin improvement there lately, which have been successful. I was wondering if there's any additional potential margin upside coming from the new products that you're introducing over there. Maybe your thoughts on you know, how that can contribute to both revenue growth and margin going forward.

Yeah, so you mean the Luma and the MultiLift, right?

Yeah, the Luma and any other product that you would introduce in Europe in the next year or two as well.

Yeah, so to answer your question, yeah, so those products come in with, they're going to be margin-accretive, right? So they have good margins and Because as you may remember, so we're fully integrated vertically. So we make the products almost from scratch. So we get the manufacturing margin, but also margin as we distribute it in Europe. So yes, those should help. We also have still a number of initiatives to improve the margins in Europe, right? Whether it's in our sales and marketing costs or sometimes the products that we're continuing to innovate even in our products. And we have pretty large opportunities coming up. I won't reveal the details, but it will come later this year. But we have a path to increase the margins still over there.

Definitely, JP and Fred. Okay, the one-stop shop has been a key in North America. That's why our dealer likes to work with us in Europe. Before, we just had a stair lift. Now, with Endicott and Garavento, we have an inclined platform. Now, with Saveur, we have the porch lift. We have the Luma. We have the view lift. And again, you can imagine that all new R&D products we are going to launch are going to be worldwide from day number one. But I think the catch-up game to have the one-stop shop in Europe will finish in the next year, and then we should be in a good position to have growth again in Europe.

Great. Last question for me. Apologies if I missed it. I joined a little late to call. But on patient care, can you talk about the backlog there and maybe your thoughts on your efforts to sell like a full package? I think you were calling it selling the room. Maybe just an update on how that's going.

Thank you, Fred. You did not miss the patient care question, your first one to ask. So I think, yeah, patient care, definitely, again, the backlog is good. The backlog is high. It's always a bit lumpy from one quarter to the other, but right now we are going to get some growth this year, and for sure, again, a bit of a one-stop shop. We try to sell the bed, the mattresses, and the ceiling lift, and sometimes the floor lift as well, so definitely. We have a good product offering, and this is something that over time we want to continue to expand because we have a good sales force. We have 50 sales reps in North America. We knock on a lot of doors. So definitely if we have additional products to sell, that can be beneficial.

Maybe just one or two things to add. So in the last month, we refreshed our case goods line. So we have a partnership where we have a set of brand-new case goods, which is helping to sell the room. I think our beds, we don't talk about it much, but our beds, we keep innovating in the beds. We have some incremental improvements, and we're still working on more major improvements. One thing, I cannot, I don't have the specifics, but I know a number of our competitors import beds from China. So just keep that in mind. It may help us, right, because of the tariff situation. So our beds are still strong. So in terms of selling the room, owning the room, like you said, we still have ways to go. But we feel good about what we have right now. And with the new ceiling lift, UK's goods, decent deadline up that we keep improving, I think we're already making good progress. Super.

Great. Congrats on the quarter.

Thank you. Thank you. One moment for our next question. Our next question will come from Zachary Evershed from National Bank Financial. Your line is open.

Zach, good morning, everyone.

Congrats on the quarter.

Could we jump into the details of that planned 30 million facility expansion? By the time that you're bringing that online, do you think that you'll have enough backlog to instantly fill it, or will it be more of a slow ramp with shuffling of capacity from different locations?

Well, Zach, you know, us, again, not to repeat a bit earlier, we look on the mid-long term, no? Right now, our footprint worldwide is 1,050,000. This is going to bring us to 1.1 million square foot of manufacturing potential worldwide. And if we look at the next five years, we're in a growing business. We'll have more additional volume. We like to make the acquisition. An example, we bought the line of product. We brought it back within our footprint. So I think in the next few years, there will be enough projects, okay, that we can use this space in the U.S. and continue to have a good footprint in Canada. So it's not that we're going to move everything from the U.S. to Canada. From Canada to the U.S., no, we want to manufacture more locally, rebalance a bit our supply chain. For example, we have open Mexico to rebalance with China and Mexico. But that's the same with the U.S. We really want to rebalance a bit North America that we have capacity for the future. I think that's the key message. And regardless of tariff or not or what will happen next year to manufacture locally, I think it's always a benefit to be closer to your customer. And I think in the 30 million, yes, there's a bit of a matter of fact of the building that we are expanding, 55,000 square foot, and that's our own building, so that's always good. But there's some machinery as well because we like to make parts by ourselves. We like to be vertical integrated.

Good, Tyler. Thank you. And then just quickly touching on the Western Elevator acquisition, could you tell us about how that came about, whether it's a standard playbook and what kind of multiple you're paying for tuck-ins these days?

Thank you. I think right now we have approximately 30 direct stores worldwide. So, again, that would be number 31. So I think, yes, the playbook is quite well established, what we can improve on the short term to have a better synergy. and to make sure we can leverage on that, that we have the same practice across all our direct stores. So definitely, their team is a well-known game, so I'm not worried about a game plan. And also, what's nice is that the team over there is very stable. The two owners are staying with us for a certain time, so I think that's very positive. So there will be very good stability. So that will be a bit my answer.

Thank you very much. I'll turn it over.

Thank you. Thank you. One moment for our next question. Our next question will come from the line of Jonathan Goldman from Scotiabank. Your line is open.

Hi, Jonathan.

Hi. Good morning, guys. Thanks for taking my questions. Really nice quarter. Most of them I've already been asked, and I apologize if I missed this because I joined late. But, you know, really nice margins in the quarter, 18.5%. It looks like a record for a Q1 by at least 200 basis points. I think the original Severia 1 target was for 20%. EBITDA margins, but how are you thinking about that target, you know, maybe in the mid to long term, given the results you just had and all the initiatives that are still ongoing?

John, that's a very good question, but I think now the last 12 months we're at 19%, so I think the 20% we can see it, okay, that's definitely a target, and I think for the Savaria 2.0, we need to wait a little bit to set up the new bar, but definitely you can see that once you reach 20%, if you're able to bring additional sales, but I guess we should be able to continue to expand a bit on that, but I think we need to wait a bit to make a new commitment.

I'm sure JP has a bunch of initiatives to go.

Yeah, I think, Jonathan, you should look at our business, right? Like some parts of the business are more vertically integrated than others. So you can imagine the more we go, the more we want to drive towards that. So where we have more vertical integration, like in North America, we have better margins. So that's a bit how we're making about it.

No, fair enough. That's it for me. I'll get back to you. Thanks for the call, guys.

One moment for our next question. Our next question will come from Michael Glenn from Raymond James. Your line is open.

Hey, Michael. Hey. Just wondering if you have any view or any of the volume that you saw in Q1 was related to some customers buying ahead related to... potential tariffs?

A very good question, but you know, all our products are really custom-made, so again, it's come from a true order that is designed for us, so it's a curved stairlift, so except some straight stairlift that you can maybe stock a bit, but I don't see a massive spike on that, but I think now people have really taken delivery of what they were supposed to take. Again, is there maybe a million more that people took? Maybe the answer is yes, but the It's not a dozen of millions because, again, it's difficult to stock too much custom product or to pull too much forward. And we still have a good backlog, so it's not like we have to eat everything in the first quarter. So I don't think it was that.

Okay. That's a great explanation, Sebastian. Thank you. Thanks.

Thank you. Once again, that's star 11 for questions, star 111. And I'm not showing any further questions at this time. I would like to turn it back over to Sebastian for any closing remarks.

Thank you very much. And thanks to the analyst that followed us. I think you know well the story. Your reports are good. You have good questions. So thank you very much for that. On that, I think we had good results. I think that's pretty clear to all the documents. But any questions, you can always come see us today at the Annual Assembly in Montreal at 11 o'clock. Otherwise, we'll see you there in Q2. Thank you very much.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.